Coverage Gaps in Medicare Services

No one wants to hear “Medicare coverage gap” when it comes to their health insurance, but many senior citizens will be facing exactly that as they transition into Medicare services over the long-term. Three important questions need to be addressed: 1) what exactly is the Medicare coverage gap, 2) to whom does it apply, and 3) what can seniors do to minimize the financial risk to themselves and their families? First, it’s necessary to understand that Medicare plans do not cover 100% of pharmaceutical drugs and other medical services. Many seniors may turn 65 and, having not had health insurance for years, be under the impression that all of their medical costs will be compensated, but that simply isn’t the case.

The Medicare Part D coverage gap (also known as the donut hole) lies between the coverage limit and the threshold for the catastrophic-coverage plan. What this means for seniors with significant pharmaceutical drug expenses is that there is a gap in their coverage if they exceed their initial yearly coverage limit. After this point, they will be paying a significantly higher percentage of the pharmaceutical drug costs until the catastrophic-coverage portion of their plan is reached. Understandably, this is disturbing news for senior citizens who depend on their medications to ensure a high quality of life and (occasionally) their survival.

What can seniors do to reduce financial complications heading into the Medicare coverage gap? Education is essential. Medicare.gov hosts information related to pharmaceutical drug coverage, health insurance, and state and federal assistance programs for senior citizens who are struggling financially, or simply need help with the web-based components of the application program. Seniors may also be eligible for Medicaid, a state-by-state federally funded program that provides health insurance and other compensation to individuals and families experiencing financial hardship. In fact, a cottage industry of law professionals now exists to help senior citizens divide their assets in such a way as to be eligible for Medicaid. Often this is necessary due to Medicaid’s stringent asset requirements, which may disqualify seniors if they own a home or car.

Seniors also need to stay abreast of any changes made to recent healthcare reform legislation, particularly the Affordable Care Act (also known as Obamacare or the ACA) of 2010. The Affordable Care Act first gained notoriety by mandating small business owners with 50 or more full-time employees to provide health insurance coverage plans for their full-time staff. In the coming years, the Affordable Care Act may be amended to exert significant influence over the way that Medicare revenue is distributed, so seniors are advised to ask their physicians regarding any recent changes that may affect their coverage.